Perry Beneficiary Behind Federal Health Website

Gov. Rick Perry speaks at the Star of Texas Awards ceremony on Sept. 12, 2013.
Gov. Rick Perry speaks at the Star of Texas Awards ceremony on Sept. 12, 2013.

The lead technology contractor behind the problem-ridden federal online health insurance marketplace is a beneficiary of the Texas Enterprise Fund, according to a money-in-politics watchdog group.

Texans for Public Justice reported Friday afternoon that Montreal-based CGI Group, which provides IT consulting services, received a $1.8 million state investment in 2011 through the Texas Enterprise Fund, a state business incentive fund overseen by Gov. Rick Perry.

The company’s CGI Federal subsidiary is the IT contractor behind the Healthcare.gov insurance marketplace website — a key component of the Affordable Care Act launched Oct. 1. The rollout of the website was received with reports of technical problems that kept individuals from signing up and purchasing health insurance plans.

Perry, a fierce opponent of the health care reform law, announced the investment in the company as part of an incentive agreement to bring CGI’s first U.S. branch to Belton, south of Waco, with the expectation that the company would create 350 jobs in Texas at the end of the agreement.

Lucy Nashed, a Perry spokeswoman, defended the state’s investment in CGI and said it was unrelated to the website’s technical problems.

 

“No one should be surprised that Obamacare is failing under the weight of its own shortcomings,” Nashed said. “CGI’s (Texas Enterprise Fund) contract has nothing to do with Obamacare – they are creating 350 jobs for Texans, including a significant number of veterans.”

Perry relies on the Texas Enterprise Fund to award millions in tax dollars to close the deal with businesses that are expected to create jobs in Texas.

A breakdown of Texas Enterprise Fund awards shows the CGI’s contract with the governor’s office began in October 2011, and the company has received at least two payouts of $600,000 since then.

Investments are approved by the governor, Lt. Gov. David Dewhurst and House Speaker Joe Straus. CGI has contributed thousands to Perry, Straus and the Republican Party of Texas since 2004, according to Texans for Public Justice.

Watchdog groups and ethics organizations have long criticized Perry for using “crony capitalism” and the Texas Enterprise Fund to give handouts to corporations that support him.

Craig McDonald, executive director of Texans for Public Justice, said the finding is ironic considering Perry’s use of the fund to pick “winners and losers.”

“I guess he didn’t know how badly this firm would be a loser,” McDonald said. “But maybe it’s a winner in his eyes. This corporation has done more damage to Obamacare than [U.S. Sen. Ted] Cruz did in three weeks.”

Cruz has fought to defund the Affordable Care Act, grabbing national attention for speaking for 21 hours in opposition to the law and encouraging congressional Republicans' efforts to refuse any budget deal that did not strip financing for Obamacare. The budget impasse led to a 16-day government shutdown.

CGI is set to receive millions of dollars more from another state entity.

The Texas Railroad Commission, which regulates the state’s oil and gas industry, awarded CGI a $13.9 million contract in August for an “IT modernization” program.

 

Texas Tribune donors or members may be quoted or mentioned in our stories, or may be the subject of them. For a complete list of contributors, click here.